Health insurers defend premium increases

Private health insurers are warning the Turnbull government there are no short-term fixes towards achieving affordable healthcare.

Private Healthcare Australia, which represents the insurance industry, also defended premium increases, saying insurers are working to keep them as low as possible.

The comments from the group's chief executive, Dr Rachel David, came in response to an announcement by Health Minister Sussan Ley that she was stepping in to demand insurers justify their increase requests.

Ms Ley has asked all providers to resubmit an application for a lower premium increase or to provide evidence of extenuating circumstances.

"It is important I am armed with the full picture before approving any premium increase, particularly as consumers are telling me they are finding it increasingly difficult to simply `shop around' for a better deal," she said on Saturday.

But Dr David says funds take the issue of premium increases very seriously.

Last year's average increase of 6.18 per cent was less than the 7.4 per cent increase in benefits paid by funds over the past year.

"This shows that the industry is working hard to keep premiums as low as possible, by introducing efficiencies into their own operations."

She agrees the minister is right to express concern about the impact of rising health costs on consumers.

"Health funds are prepared to work with the government towards the goal of affordable healthcare, but there are no short-term fixes, and this must be done with appropriate consultation and from an accurate fact base," she said.

Opposition Leader Bill Shorten criticised the coalition for overseeing premium rises, with the last two increases the highest in a decade.

"Two years on, the Liberals are now realising that the horse has bolted and they've got to do something about it," he told reporters in Brisbane.

"As they approach an election the government is scrambling around trying to do something because they realise that for the cost of premiums going up, some of the largest numbers we've seen in a decade, Australians are deeply dissatisfied."

Ms Ley said she was concerned the process used to approve premium increases didn't allow the government a rigorous assessment of an insurer's full financial position.

She has asked the health department to work with insurers to make sure any increases are the "minimum necessary".

"Feedback from the government's consultations on private health insurance showed consumers have strong concerns about the affordability of their premiums," she said.

"Hardly surprising given premiums have increased at a rate of around six per cent per year for the past five years."

Labor's health spokeswoman Catherine King said the opposition welcomed closer examination but voters were right to be sceptical.

"If the minister is serious about reducing the cost of private health insurance premiums she should explain why the two highest increases in a decade were approved on this government's watch."